# ALLIANCE
PHARMACEUTICAL CORP.6175 LUSK BLVDSAN DIEGO, CA 91212

February 13, 2004

Thomas O. GephartVentana Capital
Partners LLC18881 VonKarman AvenueIrvine, CA 92612

Dear Tom,

This
letter agreement sets forth our understanding with respect to (a) the $500,000 loan
provided by Technology Gateway Partnership, L.P. (TGP) to PFC Therapeutics,
LLC (PFC) on November 20, 2003 (the Loan), and (b) the following
Loan-related documents: the Secured Convertible Note Purchase Agreement dated November 20,
2003 by and among TGP and PFC (the Purchase Agreement), the Security Agreement dated
November 20, 2003 by and among TGP and PFC (the Security Agreement) , the
Secured Convertible Note in the principal amount of $500,000 issued November 20, 2003 by
PFC in favor of TGP (the Note), the Warrant to purchase Units of Membership
Interest issued November 20, 2003 by PFC to TGP (the Warrant), and the
Guaranty and Security Agreement dated November 20, 2003 by and among Alliance
Pharmaceutical Corp. (Alliance) and TGP (the Guaranty).

1.    Issuance
of Alliance Common Stock. Alliance hereby agrees to issue TGP           2,500,000
shares of Alliance common stock (the Shares). Alliance           further
agrees to include the Shares in the resale registration statement to be           filed
under the Securities Act of 1933, as amended, in connection with the offer           and
sale of 5,000,000 PFC units of limited liability company interest and           warrants
to purchase 17,500,000 shares of Alliance common stock (the           Financing).

2.    Cancellation
of Warrant. In consideration for the issuance of the Shares,           the Warrant
will be cancelled, and all of TGPs rights under the Warrant           will be
terminated; provided, however, that if the Financing does           not
close within 180 days of the date of this letter agreement, the Warrant will           be
re-issued to TGP.

3.    Conversion
of Loan. The parties further agree that, at the close of the           Financing, the
Loan will convert into an equity interest in PFC on the terms of           the Financing.
In connection therewith, the covenants and obligations of PFC           under the
Purchase Agreement shall be terminated, the Security Agreement shall           be
terminated, the Note shall be cancelled, and the Guaranty shall be           terminated;
provided, however, that Section 3 of the Guaranty           (Absolute
Assignment) shall survive the termination of the Guaranty; provided, however,
further, that, upon the reasonable           request of Alliance, TGP shall accept
shares of Photogen Technologies, Inc. (or           any successor thereof) having a value
of $500,000 in satisfaction of           Alliances obligations under Section 3 of
the Guaranty.

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4.    General.
This letter agreement constitutes the entire agreement between           the parties
regarding the subject matter set forth herein. This letter agreement           may be
executed in one or more counterparts, each of which shall be deemed an
          original, and may be signed and transmitted via facsimile with the same
validity           as if it were an ink-signed document. The parties agree to execute
such further           documents and instruments and to take such further actions as may
be reasonably           necessary to carry out the purposes and intent of this letter
agreement.

Please
indicate your agreement with these terms by signing and returning this letter agreement to
me.

| |                  
| | -----------------
| | Very truly yours,
| | By:              
| |                  

|                         |                                                                                                                              
|------------------------ | -----------------------------------------------------------------------------------------------------------------------------
|ACKNOWLEDGED AND AGREED: |                                                                                                                              
|By:                      | /s/  Thomas O. Gephart                                                                                                       
|                         | Thomas O. Gephart
Managing Partner, Ventana Capital Partners LLC, the
General Partner of Technology Gateway Partnership, L.P.